By Johnny Jackson
Consumers and retailers are beginning to see some relief at the gas pump and should see more this week, according to industry officials.
Metro Atlanta's average, per-gallon gas prices have fallen by 31 cents this month, after crude oil spiked at an all-time high, $147.27 per barrel, and then began to decline.
Crude oil opened at $115.20 per barrel on the New York Mercantile Exchange on Monday, when average gas prices continued to decline from the $4.10 per gallon record set on July 17. Atlantans now pay 35 cents less - an average $3.75 per gallon of regular unleaded gas.
"There are a lot of reasons to believe that the bubble has burst in crude oil," said Gregg Laskoski, spokesman for AAA Auto Club South.
One factor is the decreased local and regional demand, or consumption. "We've seen a pretty steady decline in U.S. consumption all year, and many of us cut down on the discretionary driving," Laskoski said.
Additionally, several school districts in Georgia have already returned to school, weeks before the traditional Labor Day start, which practically signifies the end of the summer travel season.
"There are plenty of kids already back to school," he said. "If the kids are back to school, that means fewer people traveling and less demand for gas. The early return to school may reduce strong demand. But we still think the number [of travelers] will be significant for Labor Day weekend."
Labor Day weekend, however, is typically slow for some gas retailers. Demetrie Porter, manager of the Murphy USA gas station in McDonough, said most business is done during the summer vacation season.
But with gas prices on the decline, many are returning to the gas station and filling up their tanks. The station has sold nearly 1,000 gallons more per day since prices began to decline.
"Earlier in the year, crude oil - like many other commodities - was pushed to record highs as investors sought a haven against the dollar's decline," Laskoski said. "What we're seeing now is just the opposite. The dollar is making solid gains at a time when the euro has incurred its biggest weekly loss since January 2005. When the dollar is stronger, commodities lose their luster."
Laskoski said even with the current conflicts stirring between Russia and Georgia, the crude-oil market should still see some price declines. "There's nothing on the horizon that would give any catalyst to crude oil prices rising, barring the situation with Russia and Georgia [and inclement weather]," he said. "We think gas prices will continue to go down."
Some analysts, he said, have projected average gas prices will dip as low as $3.50 per gallon by Labor Day, if demand remains relatively low - which could also mean no more above $4-per-gallon gas for the remainder of the year.
"We typically see gasoline prices at their lowest point during the fourth quarter," Laskoski said. This fall, oil refineries will begin changing over to a winter grade of fuel, which will temporarily decrease supply but typically reduce prices through the winter.
Prices still remain more than a dollar higher than this time one year ago, but are significantly lower than record prices set in mid-July. Currently, consumers nationwide are paying $3.81 per gallon of regular unleaded. Atlantans are paying $3.55 per gallon - $1.03 more than this time last year.
Diesel in Atlanta costs an average $4.57, compared to $2.87 at this point last year.
"With a stronger dollar and the federal government reporting healthy supply and demand figures, we can expect both crude and retail gasoline prices to continue to decline this week," Laskoski said.